By Lauren Hirsch and Greg Roumeliotis
Reddi-wip whipped cream owner Conagra Brands Inc (CAG.N) has approached Pinnacle Foods Inc (PF.N), the maker of packaged foods such as Vlasic pickles, to express interest in an acquisition, people familiar with the matter said on Wednesday.Conagra's approach shows that Pinnacle Foods remains an acquisition target, three years after its $4.3 billion sale to Hillshire Brands was cancelled after Hillshire agreed to sell itself to Tyson Foods Inc (TSN.N) for $7.7 billion.Hillshire was led at the time by Sean Connolly, who is now chief executive of Conagra. His second attempt at an acquisition of Pinnacle Foods underscores the need for further consolidation in the frozen food and condiments sectors, as sales continue to decline with consumers opting for healthier choices.
Conagra's approach to Pinnacle Foods took place in the last few weeks, the sources said. There is no certainty that Pinnacle Foods will choose to engage, or that Conagra will pursue a potential deal further, the sources said on Wednesday.The sources asked not to be identified because the matter is confidential. Conagra, which has a market value of $16.2 billion, declined to comment. Pinnacle Foods, which has a market value of $7.2 billion, did not immediately respond to a request for comment.
Chicago, Illinois-based Conagra, whose brands include Frontera salsa and Orville Redenbacher's popcorn, has been seeking to reinvent itself since selling its private label unit for $2.7 billion in 2016 to focus on its branded food business.Last year it spun off its $6.9 billion frozen potato business, Lamb Weston Holdings Inc (LW.N). It has also divested a number of its smaller underperforming brands, and this week agreed to sell its Wesson oil brand to Folgers coffee maker J. M. Smucker Co (SJM.N) for $285 million.
Parsippany, New Jersey-based Pinnacle, whose brands include Duncan Hines baking products and Birds Eye frozen vegetables, has made a push towards healthier offerings. It bought Boulder Brands Inc, owner of Udi's Gluten Free Bread, for $975 million last year.Conagra and Pinnacle Foods are among the companies weighing offers for Reckitt Benckiser Group's (RB.L) North American food business, estimated to be worth around $3 billion, Reuters reported earlier on Wednesday. (Reporting by Lauren Hirsch and Greg Roumeliotis in New York; Editing by Bill Rigby)
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Updated Date: Jun 01, 2017 05:51 AM